So the reduced power of post war rich, combined with fear of communism resulted in the Democratic Socialist consensus that gave us high taxes and a big middle class. (And Vietnam but I digress).
Since fear of Communism has eased and the rich have again massed giant fortunes there's little to stop them weakening the rules that prevent our Democracies from being bought.
To me this is a compelling explanation for how you end up with Trump running against Clinton two historically disliked candidates. Almost everything in the news is just noise to the slow grinding power of wealth accumulation. Occasionally you get a glimpse as WaPo is bought by Bezos, Trump gets elected and Zuck clearly starts to form some presidential ambitions. But largely everything is a distraction to pull your eyeballs, after all that's what our media is paid to do.
[1] http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014Fig...
[2] Capital in Britain 1700-2010: http://piketty.pse.ens.fr/files/capital21c/en/pdf/F3.1.pdf
The real questions of import are left completely unanswered in that book: what meaningful policy changes can be made to increase jobs, training, education, lower costs (that's a big one--she never mentions the supply side at all) and other meaningful metrics that actually move the needle rather than merely evince patronizing sympathy from her Prius-driving, suburb-occupying, Ivy League-educated audience.
It's good that she didn't try to tackle a problem completely outside her competence, unlike the libertarian economists of HN.
It's not that being poor is extremely difficult in the US in particular, but rather that those born wealthy who have never been poor, have no idea how to operate in that environment.
It was a long time since I read the book, but I recall that the experiment ended because she had more unforseen expenses than she could keep up with. I think her car broke down a few times and as she had no money in her pocket, she had to take out payday loans to get it repaired. Eventually she couldn't do that anymore so no car, no way to get to work, no job and no income.
By spending limited resources on yachts instead of schools and hospitals?
Of course, medicine and education could put some more money to good use, but likely invested very differently.
This is why more power in the hands of SV companies like Google, Facebook and other VC funded startups become worrying as with power they will build a desolate soulless uncaring world.
Devaluing other human beings is like cutting the branch you sit on, you only devalue yourself. You can't build a healthy country or society without a collective and empathy. What happens during harder times?
One wonders if this is because of religious ideologies like calvinism and others in their ilk or some taking sociopathic ideologies by people like rand designed purely to appeal to egoistic individualism and the rich seriously.
hardly. The only thing that video shows me is people dont really think very hard about their expectations between the very top and the very bottom.
Milton Friedman on greed and income inequality: https://youtu.be/RWsx1X8PV_A
However, we also suppose that some level of inequality can lead to greater productivity, and thus greater utility overall. The question is then what level produces the best outcome?
Personally, I don't think the current levels of inequality are remotely optimal. We could drastically improve thousands of people's lives for amounts of money that some rich individuals wouldn't get out of bed for, so I'm not convinced that reallocating that wealth would be harmful overall.
So now that we have organized our thinking, let us consider the empirical evidence. Most famously, it comes from the recent work of Miles Corak, building on previous studies by Gary Solon, Blunden, Gregg and Macmillan, Björklund and Jäntti and others. What these authors find is that there is a strong correlation between current and inter-generational inequality, or in other words, between inequality and low social mobility: the more unequal the society the less likely is the next generation to move upwards (or conversely, the less likely is the decline of the rich). So in terms of our simple diagram, Corak finds that societies are aligned along the diagonal: there are no outliers, whether the societies exhibiting the American dream or the guild-like ones.
The implication of that finding which was dubbed by Alan Krueger the Great Gatsby curve is that there is no American exceptionalism. The comforting picture of high inequality which does not impede mobility between generations turns out to be false. US does not behave any differently than other societies with high inequality. High income inequality today reinforces income differences between the generations and makes social mobility more difficult to achieve. This is also the point of my recent paper with Roy van der Weide. We use US micro data from 1960 to 2010 to show that poor people in US states with higher initial inequality experienced lower income growth in subsequent periods).
http://glineq.blogspot.com/2016/04/the-schumpeter-hotel-inco...
Inequality is important because of the studied link between peace and prosperity. Individual participants of a civilization give their social system power by buying into a social contract that their (mostly) nonviolent participation secures them the necessities of life.
When we have natural disasters, we sometimes see the rupture of the social contract. Now, imagine that there's a continuum of levels of nonviolent participation depending on individual cost-benefit analyses occurring all of the time around you.
When inequality shifts so dramatically over just a generation or two, there's reason to be concerned that people's buy-in on the social contract might shift, too.
https://en.wikipedia.org/wiki/Economic_inequality#Effects
There is a lot of information there along the general lines of inequality is bad, which shouldn't be surprising. If you spend $1m of raw resources on building a bigger house, there is no benefit to society; theoretically it might incentivise somebody, but it's probably just pure waste.
Relative deprivation is empirically shown to be a significant source of disutility. Further, even if only absolute deprivation is held to be significant, aggregate statistics don't show you the degree to which that is present in a society without distributional measures. Either of these reasons, much less both together, make distributional measures important alongside aggregate measures.
> As Milton Friedman said, the only place where people are equal is in a prison and in the grave.
The “in a prison” part is obviously and flagrantly wrong, but even beyond that the observation is irrelevant to the discussion at hand. That some inequality will always exist in real societies does not mean degree of inequality is unimportant alongside other measures, just as the fact that some aggregate output will exist in real societies does not mean that the degree of aggregate output is unimportant.
And inequality is a good measure because the benefit of an extra N dollars is greater, the less money one already has. So, all else being equal, smaller inequality leads to greater average quality of life.
Inequality is also a measure of for whose benefit a society is working - the benefit of the ones accruing the most wealth. So the more concentrated that wealth, the more the rest of society is being ignored in favour of the richest few.
A common counterargument is saying that as long as the wealth of the lower classes also rises, then why worry about inequality. But it has been stagnant for several decades in the US, the poor have to work long hours, all while more and more wealth flows to the top. So it becomes clear that merely improving the economy won't help, as the benefits are captured by those already rich.
When one person has 10 Ferraris in their garage while someone just a few miles away can't afford to feed their children, it's unfair and unsustainable. You don't need to advocate absolute equality to see how that situation could be improved.
What counts as extreme? Has much really changed in the last few years since this became something discussed daily? Why do such articles ignore payments in kind and fail to address subtleties to do with the different measures (personal income, household etc).
I don't personally consider the existing situation extreme, and the fact that people underestimate it doesn't change my view.
>We don’t want to live like this. In our ideal distribution, the top quintile owns 32% and the bottom two quintiles own 25%. As the journalist Chrystia Freeland put it, “Americans actually live in Russia, although they think they live in Sweden. And they would like to live on a kibbutz.” Norton and Ariely found a surprising level of consensus: everyone — even Republicans and the wealthy—wants a more equal distribution of wealth than the status quo.
You'd think they'd sanity check their poetic description against professed beliefs. If your metric says that most Americans "would like to live on a kibbutz", then your metric is wrong.
What this actually shows is that most Americans have no idea what wealth inequality looks like. Ask the same group of people their predicted and ideal income inequality measurements. I predict you'll get the same numbers, plus a little noise.
A closely related question: is asking in terms of percentages biasing? And the answer is: Very Yes. http://journal.sjdm.org/12/121027/jdm121027.html
>Norton and Ariely (2011) set out to answer a remarkably important set of questions: How much inequality do ordinary Americans believe exists in the U.S.? And how much inequality do they desire? These questions have a range of important policy implications. However, the initial answers to these questions need to be reconsidered. Our findings indicate that the remarkably low estimates of wealth inequality given by Norton and Ariely’s respondents depended on the particular measure (quintile percentages) that was used. When asked to state quintile percentages for either household wealth, teacher salaries, or web page clicks, our respondents seemed to use an anchoring-and-adjustment heuristic leading to very similar responses across very different domains.
>When respondents were relieved of aggregating their intuitions about inequality into quintile percentages, another picture emerged. According to this new picture, Americans do not tend to have extremely biased perceptions of current levels of inequality. Nor do they entertain an ideal of near-perfect egalitarianism. Rather they seem to prefer a world where the poor are not as poor as they are today. Further investigation into this more tractable ideal might provide a basis for workable policy prescriptions.
I apologise for being rude but it sounds like you have limited compassion if you haven't been able to think this one through. What do you want to do, sterilise the poor?
I would remind you that despite a poor background children can and do still excel and even if they don't these children are often the backbone of our industry. You might not approve but these people are still the workforce and generation of tomorrow so you should afford their inception a little more respect and empathy.
Only occasionally. And that does not justify raising children in a difficult environment!
> What do you want to do, sterilise the poor?
I agree that the parent phrased that post very poorly.
However many countries did a lot of effective work to prevent unplanned parenthood, including education and access to contraceptives and abortion rather than sterilization or punishment.
> even if they don't these children are often the backbone of our industry
This sounds like the world need enough desperate people to accept exploitative jobs or go to war and so on? I hope humanity can do better than that.
Reversible sterilization for everyone by default, temporary reversal for a fee. Make people pay for externalities.
Also, you are painting a false dichotomy between "rich" and "poor". A lot of middle and lower class people can raise healthy and happy children unless they have problems with mental health / violence / substance abuse & so on.
> taking away the only joy in some people's lives
Looking at children as a source of joy instead of a recipient of unconditional care and effort sounds very narcissistic.
Raising children is a very resource and labour-heavy endeavour. Rich people have more resources and labour. It's only logical that they can afford the children while poor people don't.
Most of humanity was born to parents with no monetary income at all, and volatile access to resources and shelter. Imagine that!
Which I consider independently from my main argument as a stupid idea.
Not at all. An economy based on competition and inequality automatically generates as many poor as needed to balance out the super rich. It's really basic math.
I.e. 'stick the winkie in the hoo-hah and wiggle it around'
